If An Appliance Fails Should You Repair or Replace?

When an appliance fails in your rental property, the decision to repair or replace will likely come up. Unfortunately, there isn’t a definitive answer, as many things in real estate the answer is it depends.

Today we’re going to look at both sides of the argument in order for you to be able to make the best informed decision.

Reasons to Repair an Appliance

Repairing an appliance is often the preferred option when the unit is relatively new, hasn’t yet shown a pattern of repeat failure and was a mid to high quality appliance originally. From a landlord’s point of view, the key consideration is whether the repair would meaningfully extend the appliance’s usefulness at a reasonable cost. 

This is where the original purchase price and build quality matters most. More expensive appliances are oftentimes constructed with more robust materials and parts, these traits increase the likelihood that a repair will last. For landlords who are do it yourself (DIY) capable or have access to affordable service techs, repairs can not only be completed quickly, it can be done economically. This can minimize downtime of the appliance and significantly improve your relationship with your tenant.

Warranty coverage shifts the balance towards repairs even more. Many of the premium appliances include some kind of manufacturer warranties or extended service plans that can offset labor and parts costs. In these cases, the higher upfront price will likely already account for future servicing, making repairing the appliance a rational continuation of this investment.

Repairs can also go a long way in reducing tenant disruption. Replacing an appliance may require ordering delays, scheduling the removal and installation of the appliance or sometimes having to modify the rental’s cabinetry and connection to make the new appliance work. A timely repair can not only restore service faster, it can reduce complaints from tenants while maintaining good will.

Reasons to Replace an Appliance

On the other hand, replacement becomes the more practical option when an appliance is past its life expectancy, unreliable or inexpensive to begin with. This is because low priced appliances often achieve this price point through the use of thinner, less robust materials and minimal serviceability, this is where you see plastic welded parts instead of clips or screws. When these units fail, repairs tend to be either frequent or short lived. Cheaper appliances should expect several shortcoming including:

• Shorter overall lifespan
• Higher likelihood of repeat breakdown
• Limited availability of replacement parts
• Poor service documentation

In these cases, repair costs can quickly accumulate without the benefits of long term reliability. Replacing these appliances avoids recurring service calls as well as administrative overhead. Unfortunately, really high end appliances may also justify replacement under certain conditions. This is due to high end models often relying on proprietary electronics and specialized parts. These features can make repairs impractical for even DIY friendly landlords, while having expensive professional repair costs if the appliance is out of warranty. In these cases replacement may be more predictable and cost effective despite the higher initial expense, though this is usually limited to higher end luxury rental properties and isn't the norm.

Finally, if the appliance has reached or exceeded its typical service life, a replacement or upgrade is also advisable. Older units are more likely to fail unpredictably, and this can risk tenant dissatisfaction or emergency repairs caused by the failing appliance that may not have modern safety features such as internal surge protection in case of damaged wiring. 

For landlords, the repair or replace decision should be driven by asset performance. Repair is justified when it extends the utility at a low cost while maintaining reliability. Replacement is a better choice when appliances are either cheap, too old, or too difficult or expensive to service. If you need help understanding which of your appliances fall under which category or if you need help managing your Beach City rental property, we invite you to call us today at (562) 888-0247 or complete our Owner Application online.